Italy gives EU cause for concern even as Greece clears its debts

MONDAY saw the political milestone event of Greece officially completing an eight-year bailout programme following an economic collapse on the scale of the Great Depression. Yet, important as this moment could be for Athens and the EU at large, several European nations - including G-7 Italy - continue to have very difficult debt problems that could paralyse the eurozone again, politically and economically.

Today, it is Rome, not Athens that arouses most economic alarm in Europe following Italy's inconclusive general election this year that proved to be the midwife for a populist coalition of the political right that could yet shake up the continent. Rome is now perceived by some to pose perhaps the biggest threat to the eurozone's future because the country has the second biggest debt load in the single currency area after Athens (at over 130% of gross domestic product or GDP), and its banking sector remains under stress with big under-performing loans.

Moreover, Italy, unlike Greece, has long been at the political core of the EU project as a key G-7 nation which has the third largest eurozone economy. Hence another reason why a future crisis in Italy could be several magnitudes more concerning, both politically and economically, for Brussels than has been the case for Greece.